Why has there been structural support for cultivating oil palm and rubber in West Kalimantan, but not for Jatropha?

Quote: “With regard to local government, there should also be a strengthening of policy implementation in districts with ‘marginal land’.”

As jatropha fever swept all over Indonesia in 2006, it caught West Kalimantan in its grip. Hundreds of hectares of land were cultivated with this miracle biofuel crop. Seeds for planting were bought at the exorbitant price of Rp. 25,000/kilogram from farmers’ associations, which cemented the belief that jatropha would have a high market value, far higher than that of palm oil, which was only Rp. 800/kilogram at that time. The enthusiasm with which jatropha was received is understandable. Unlike palm oil, which in effect had robbed local farmers of thousands of hectares of their land and placed it in the hands of companies and city-based investors (1), jatropha was said to be a crop fit for smallholders. Yet four years into the fever, jatropha cultivation was entirely abandoned while the dreaded palm oil is flourishing and expanding. West Kalimantan is no stranger to market crops. Along the path of its history new crops have come and gone. Each began with high hopes, but was soon exposed to a set of harsh reality checks regarding the availability of the means of production, a production network and political support (2). Data for this paper was collected among the palm oil farmers of the Meliau sub-district, West Kalimantan, in the summers of 2010, July 2011 and July 2013.

Introduced as suitable for marginal lands, in practice jatropha was cultivated side by side with other crops because in that sparsely populated province even the infertile acidic peat swamps have been pressed into either palm oil or rubber fields. As a consequence, the productivity of this biofuel crop has to be calculated against rubber or palm oil. Jatropha was said to be capable of surviving with low input, which is good for dealing with market fluctuation. In times of low prices the trees can be left on their own, while when prices are good the input of fertilizer and labor can be increased to boost the harvest. Everyone engaged in the cultivation was in high spirits and firmly believed that jatropha would become the province’s new economic star. On several occasions, the head of Sanggau Regency inspected the jatropha fields with his entourage, and in 2008 he proudly led the harvest ceremony. Right after that people began to realize that jatropha cultivation did not live up to their expectations. Without proper market network support, the tons of seeds produced by the cultivation were stuck in farmers’ houses.

Jatropha enthusiasts – some local members of parliament, government officials and businessmen – created a farmers’ association and tried to salvage the situation by offering to buy the harvest at a low price of Rp. 1,000, instead of Rp. 5,000 per kilogram for planting seeds. Yet this effort did not last for long, since it did not solve the ultimate problem of the absence of a final buyer for the harvest. There was no jatropha-oil-processing plant nearby. Not in Sanggau, not in Pontianak, not in the entire province. To avoid total loss farmers were told to use the seeds as stove fuel, in accordance with the government campaign of energy self-sufficiency. Unfortunately, the government-issued and highly praised kompor biji jarak, or jatropha seed stove, was not easy to light and produced excellent soot, but poor heat. In short, the stove was useless. No housewife, no matter how desperate, would use it to cook.

The introduction of jatropha was carried out through government bureaucratic lines as an “order from Jakarta,” which drove officials and farmers to forget that cultivation of a crop requires the proper support of a trading network and government protection. Take rubber as an example. In spite of price fluctuation and market crises, rubber survives and farmers stubbornly maintain this crop as one of their most important revenue sources. Since its introduction in the 1910s, rubber slab has been taken care of by a vast credit-based network, starting in headwater areas with hamlet-based collectors, tokeh, and trading further downstream, passing into the hands of bigger and bigger traders before eventually entering processing plants in Pontianak (3, 4). The network operates to ensure continuity of supply from farmers, as well as to cushion the fluctuation of market demand.

Although plagued by never-ending tension between plantation companies and local farmers over land ownership, palm oil cultivation continues to expand in West Kalimantan, thanks to lavish – official and unofficial – protection from the government. Based on the Malaysian experience, palm oil has been promoted by the government to increase gross national product. The global market demand for palm oil is on the rise. Fields were provided by releasing logged forestlands or by pressuring smallholding farmers to hand over their farmlands (5, 6).

Plantation field with oil palm – a highly productive crop, which nonetheless requires thousands of hectares to make it economically profitable. Photo: Pujo Semedi, West Kalimantan 2011

Those who moved against palm oil companies, especially during the New Order period, were branded as anti-government. Labor was supplied through a government-sponsored transmigration program (see picture below with farmers from Java), while banks were ordered to create special schemes to provide working capital for palm oil companies.

Farmers from Java who cultivate oil palm in Kalimantan as primary crop rather than as a side activity. Photo: Pujo Semedi, West Kalimantan, 2011.

Crude palm oil processing plant (see smoke) located right next to the fields. Photo: Pujo Semedi, West Kalimantan 2011.

Processing plants were established next to the fields. Palm oil is a billion dollar business, good for the economy and with side benefits to government officials. It is easy to imagine how the head of a poor-budget regency – one barely capable of maintaining the roads – can afford to visit Beijing for a month every year to promote crude palm oil. Oil palm cultivation has been so productive and profitable that government officials have been privately establishing estates of 50-300 hectares, capable of bringing billions of rupiah in annual turnover. The above reasons are enough to ensure the stability of the political protection of palm oil.

Fate has not been so kind to jatropha. A private-sector network for this crop never got off the ground and government enthusiasm was neither comprehensive nor persistent. From the comparison with the history of rubber and oil palm in West Kalimantan, we can learn that the requirements for establishing a lasting agricultural cultivation sector are: (a) government protection; (b) a reliable trading and processing chain for harvest; and (c) a competitive profit margin.